Oil prices stay elevated with renewed signs of re-escalation

"June delivery Light Crude Oil Futures (WTI), the price is moving higher by over 2% today, currently trading at 103.45; meanwhile, ICE Brent Crude Futures are trading at 107.63, up 1.81%. Oil prices remain high amid a lack of clear progress on the diplomatic front in the Middle East. Additionally, signs of escalation are reappearing following Trump's recent remarks during his visit to China, expressing frustration with Iran."

"This comes amid ongoing supply disruptions and Iran's ability to maintain its firepower and close the Strait of Hormuz, which could cause even greater damage to energy supply chains. President Trump has expressed growing impatience with Iran following high-level talks with Chinese President Xi Jinping. While both leaders agreed on the necessity of keeping the Strait of Hormuz open and preventing Iran from acquiring nuclear weapons, the conflict remains at a diplomatic standstill."

"Iran continues to refuse demands to relinquish its enriched uranium stockpile, while simultaneously leveraging its control over the waterway. As the war drags on, stockpiles will continue to dwindle worldwide, foreshadowing a catastrophe even deeper than the current one, despite partial adaptation by regional oil exporters through alternative routes that would restore some balance to the market. Global oil inventories are vanishing at a record pace, threatening to upend the relative calm in energy markets since the closure of the Strait of Hormuz."

"According to The Wall Street Journal, citing the International Energy Agency, global stockpiles plunged by 250 million barrels across March and April, a volume equal to roughly 2.5 days of global use. While an initial surplus and emergency releases from the International Energy Agency have cushioned the blow, Ellen Wald of the Atlantic Council's Global Energy Center warns that "when inventories run out, they are going to run out." This could potentially send prices toward $140 a barrel, per Capital Economics estimates"

June WTI futures trade higher by more than 2% at 103.45, while ICE Brent futures rise to 107.63. Oil remains elevated due to limited progress on Middle East diplomacy and renewed signs of escalation tied to Trump’s remarks about Iran. Supply disruptions continue, and Iran’s ability to maintain firepower and potentially close the Strait of Hormuz threatens energy supply chains. High-level talks with Xi Jinping did not resolve the conflict, as Iran refuses demands to give up its enriched uranium while leveraging control of the waterway. Global oil inventories are declining at a record pace, with stockpiles dropping by 250 million barrels over March and April, leaving only a small buffer. Analysts warn that inventories will eventually run out, potentially pushing prices toward $140 per barrel.

Read at London Business News | Londonlovesbusiness.com